Suppose that business travellers and vacationers have the following demand for airline tickets from Dhaka to Chittagong: Quantity demanded (business travellers) Quantity demanded (vacationers) 1000 Price (in taka) 150 2100 800 600 200 2000 250 1900 300 1800 400 As the price of tickets rises from Tk250 to Tk300, what is the price elasticity of demand for (i) business travellers and (ii) vacationers? (Use the midpoint method in your calculations.) b. Why might vacationers have a different elasticity from business travellers?
Suppose that business travellers and vacationers have the following demand for airline tickets from Dhaka to Chittagong: Quantity demanded (business travellers) Quantity demanded (vacationers) 1000 Price (in taka) 150 2100 800 600 200 2000 250 1900 300 1800 400 As the price of tickets rises from Tk250 to Tk300, what is the price elasticity of demand for (i) business travellers and (ii) vacationers? (Use the midpoint method in your calculations.) b. Why might vacationers have a different elasticity from business travellers?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose that business travellers and vacationers have the following
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